Nuance buys QuadraMed info management unit

A week after buying up San Jose, Calif.-based Ditech Networks Inc., voice recognition software company Nuance Communications Inc. (Nasdaq: NUAN) said today it will acquire another company: the health information management business of QuadraMed in Reston, Va.

Carina Edwards, vice-president of healthcare solutions marketing for Nuance, told Mass High Tech that terms of the deal are not being disclosed. She said that QuadraMed’s healthcare business, a 200-employee unit called Quantim, will be folded into the company as a separate division of Nuance, and will remain in Reston, she said.

Nuance, whose technology is behind the Dragon Naturally Speaking software, has about 10,000 employees worldwide. Today, the healthcare division makes up about 40 percent of its total business, the company said.

Quantim is a provider of software and services geared toward health information management, and its main clients are hospitals and healthcare organizations. Edwards said that earlier this year, Nuance announced that it’s getting into the medical documentation business in February with the launch of its clinical language understanding (CLU) technology.

The combination of the software from both Nuance and Quantim is aimed at making the method by which doctors record patient information more efficient, so that expenses can be reimbursed. The software can interpret text or voice, and assign the proper codes to various patient conditions. That process is about to get a lot more complicated as part of national healthcare reform, said Edwards, as the number of so-called ICD codes - which serve as the foundation for financial reimbursement - will go from 17,000 to more than 155,000 by October 2014 as mandated by Medicare.

“The physician still wants to document the specific information on the patient,” said Edwards. “We can make coding much more efficient.”

Edwards said research and development teams of both companies have been meeting already on integrating the software, and while she would not give a specific timeline for the launch of the combined products, said it would happen “very quickly.”

The acquisition is the Burlington company’s third this year, having bought Ditech for $22.5 million in cash last week and Atlanta-based Transcend Services Inc. for $300 million in March. The purchase also comes a month after Nuance priced a $700 million notes offering to institutional buyers which it planned to use for acquisitions, general capital and capital expenditures.